International Economics

International Economics

International Economics

International Economics


An accessible introduction to international economics, which stresses the role of economic theory in explaining international trade and finance. It is written in a non-mathematical yet rigorous style, and at every stage theory is related to the evidence about international economic behaviour.


Few textbooks stand the test of time as well as Sidney Wells’ International Economics has. First published in 1969, and slightly revised by Dr E.W. Brassloff in 1973, it has been a leading introduction to international economics for fifteen years. Much has changed over these years, however, both in international economics and in the international economy, and it has now become necessary to make further and more drastic revisions. It has been my honour and pleasure to carry out this task.

The present edition has been completely rewritten in the course of revision. In some places this was quite inevitable, because the nature of the analysis has changed since the late 1960s. Thus, for example, the discussion of flexible exchange rates, macro-economic policy, the oil price and developments in the International Monetary Fund could not have been other than entirely new. In other instances I have chosen to rewrite the original text to take account of more recent analytical research and changes in emphasis. Thus, I adopt a different approach to the Heckscher-Ohlin theory of trade, and devote a chapter to modern theories of trade based on technology and on imperfect competition. Finally, I have increased the emphasis on testing economic hypotheses. In part this reflects my own interests, but mainly it arises from changes in the general approach to economics over the last decade.

Such drastic revision has, inevitably, had some cost—especially as the new edition is no longer than the original. First, some of the controversies of the 1960s have died a natural death; for example, the problem of sterling features only briefly, and then as an issue of recent economic history. Second, there is somewhat less space devoted to institutional matters than previously. Third, the discussion of international economic integration has been shortened, as have, fourth, certain issues in development economics. These contractions have been made reluctantly, but given the availability of alternative textbooks and the size constraints on the present edition I hope they do not do too much violence to Wells’ original intentions. While the differences just noted are considerable, the new edition is still a direct descendant of Wells’ International Economics. It bears the same overall structure, it fulfils the same purposes, it presents many of the same arguments and it has the same flavour of applied, as opposed to purely abstract, economics.

In preparing this edition, I have drawn extensively on the goodwill of my friends. Among those to whom I am most grateful for advice are Alan Armstrong, John Beath, David Demery and Partha Sen of the University of Bristol and Oli Havrylyshyn of George Washington University, who read and commented upon various draft chapters, and William Shaw of the World Bank, and John Black of the University of Exeter who read and commented on the complete draft. To the last, in particular, I owe a great debt. His help covered every aspect of the book, from its structure to its preparation for printing, and that his advice was not always taken is due only to my own stubbornness and indolence. The burdens of typing were shared by Karen Adams, Mary Harthan, Vicky Sugui and Janet Wright, with super-human patience and efficiency, while the figures were excellently traced by Carrie Pharoah. I am most grateful to all of them. The proposal that I should make this revision came from Nicholas Brealey of George Allen & Unwin, who has been helpful and patient throughout its gestation. Naturally none of these people, nor my employers, bear any responsibility for the book’s views or shortcomings.

My final debt of gratitude is to my family. My daughters, Vicki and Catey, have

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